Uber, a furnace people can’t stop shoveling money into, is looking to buy up its main restaurant delivery competitor, Grubhub, in an all-stock deal. I think we’re all wondering the same thing: What the fuck?
Yes, this is the same Uber that just laid off 14 percent of its staff on a Zoom call last week, citing economic difficulties during the coronavirus pandemic. And yes, this is the same Uber that lost nearly $3 billion last quarter, offering one of its key competitors nothing but shares in the worst-debuted stock in U.S. market history.
In fairness, while Grubhub still dominates in New York, overall its market share has been chipped away by Uber Eats and DoorDash. In that regard, merging the two efforts might make some amount of sense. “As we have consistently said, consolidation could make sense in our industry, and, like any responsible company, we are always looking at value-enhancing opportunities,” Grubhub wrote in a public-facing non-statement on Tuesday. “That said, we remain confident in our current strategy and our recent initiatives to support restaurants in this challenging environment.”
According to the Wall Street Journal, which first reported the possible takeover, Grubhub’s most recent offer asked for 2.15 Uber shares for each Grubhub share held by investors. Sources speaking to Bloomberg claim the deal “could reach an agreement as soon as this month.”
Maybe it’s a good time to remember that Uber also sold off its Eats arm in India to a rival at the beginning of this year, and less than a week ago ended operations for Eats in seven other countries.
By some estimates, a merger of Grubhub and Uber Eats would give the combined entity an approximate market share in the food delivery space of 48 percent, compared to DoorDash’s 42 percent.
Uber has not yet responded to a request for comment.